EP AUDITING+ASSURANCE...-MYACCT.LAB
16th Edition
ISBN: 9780134148656
Author: ARENS
Publisher: PEARSON CO
expand_more
expand_more
format_list_bulleted
Question
Chapter 20, Problem 13RQ
To determine
Explain the reason for the emphasis being on evaluating the adequacy of payroll tax return preparation procedures instead of the payroll tax liability.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
In auditing payroll withholding and payroll tax expense, explainwhy emphasis should normally be on evaluating the adequacy of the payroll tax returnpreparation procedures rather than the payroll tax liability. If the preparation proceduresare inadequate, explain the effect this will have on the remainder of the audit.
When control risk is assessed as low for assertions related to payroll, substantive tests of payroll balances most likely would be limited to applying analytical procedures and observing the distribution of paychecks.
True or False?
In determining the effectiveness of an entity’s policies and procedures relating to the occurrence assertion for payroll transactions, auditors most likely would inquire about anda. Observe the separation of duties concerning personnel responsibilities and payrolldisbursement.b. Inspect evidence of accounting for prenumbered payroll checks.c. Recompute the payroll deductions for employee benefits.d. Verify the preparation of the monthly payroll account bank reconciliation
Chapter 20 Solutions
EP AUDITING+ASSURANCE...-MYACCT.LAB
Ch. 20 - Prob. 1RQCh. 20 - Prob. 2RQCh. 20 - Distinguish among a payroll master file, a W-2...Ch. 20 - Prob. 4RQCh. 20 - Prob. 5RQCh. 20 - Prob. 6RQCh. 20 - Prob. 7RQCh. 20 - Prob. 8RQCh. 20 - Prob. 9RQCh. 20 - Prob. 10RQ
Ch. 20 - Prob. 11RQCh. 20 - Prob. 12RQCh. 20 - Prob. 13RQCh. 20 - Prob. 14RQCh. 20 - Prob. 15RQCh. 20 - Prob. 16.1MCQCh. 20 - Prob. 16.2MCQCh. 20 - Prob. 16.3MCQCh. 20 - Prob. 17.1MCQCh. 20 - Prob. 17.2MCQCh. 20 - Prob. 17.3MCQCh. 20 - Prob. 18.1MCQCh. 20 - Prob. 18.2MCQCh. 20 - Prob. 18.3MCQCh. 20 - Prob. 19DQPCh. 20 - Prob. 20DQPCh. 20 - Prob. 21DQPCh. 20 - Prob. 22DQPCh. 20 - Prob. 23DQPCh. 20 - Prob. 24DQPCh. 20 - Prob. 25DQPCh. 20 - The following are various asset misappropriations...Ch. 20 - Archer Uniforms, Inc., is a distributor of...Ch. 20 - Prob. 28DQPCh. 20 - Prob. 29C
Knowledge Booster
Similar questions
- Audit Procedures for Income Taxes and Deferred Tax Assets/Liabilities: Auditing income taxes and deferred tax assets/liabilities involves verifying the accuracy of a company's tax reporting and assessing the timing and amounts of deferred tax assets and liabilities. Here's a detailed breakdown of the audit procedures: 1. Review of Tax Returns and Financial Statements: Impact: Auditors compare the information reported in the company's tax returns with its financial statements to identify any discrepancies or inconsistencies. Procedure: Auditors examine tax returns, schedules, and supporting documentation to ensure that income tax provisions in the financial statements are consistent with tax filings. 2. Evaluation of Deferred Tax Assets and Liabilities: Impact: Deferred tax assets and liabilities represent future tax consequences of transactions that have already occurred but have not yet been recognized for tax purposes. Procedure: Auditors assess the validity…arrow_forwardExplain who needs to pay estimated taxes, when to file or amend your return, and how to handle an audit.arrow_forwardDescribe the nature of the evidence the internal revenue agentwill use in the audit of Jones Company’s tax return.arrow_forward
- S1: When control risk is assessed as low for assertions related to payroll, substantive tests of payroll balances most likely would be limited to applying analytical procedures and observing the distribution of paychecks. S2: A basic step in auditing unclaimed salaried and wages is to verify disposition of the account subsequent to the statement of financial position date. *A. Only statement 2 is trueB. Both statements are falseC. Both statements are trueD. Only statement 1 is truearrow_forwardWhat is a primary responsibility of taxpayers during a tax audit? a) Providing false information to the tax authority b) Cooperating with the tax authority by providing requested documentation c) Refusing to communicate with the tax authority d) Ignoring audit requests and deadlinesarrow_forwardAn audit team would most likely examine the detail support for charges to which of the following accounts?a. Payroll expense.b. Cost of goods sold.c. Supplies expense.d. Legal expense.arrow_forward
- The following are typical questions that might appear on an internal control questionnaire for payroll activities: 1. Is there adequate separation of duties between employees who maintain human resources records and employees who approve payroll disbursements? 2. Is there adequate separation of duties between personnel who maintain timekeeping or attendance records for employees and employees who distribute payroll checks? Assuming that the operating effectiveness of each of the above controls is found to be inadequate, describe how the auditors might alter their substantive procedures to compensate for the increased level of control risk.arrow_forwardWhen a CPA knows that a tax client has skimmed cash receipts and not reported the incomein the federal income tax return but signs the return as a CPA who prepared the return, theCPA has violated which of the following AICPA rules of conduct?a. The Confidential Client Information Rule.b. The Integrity and Objectivity Rule.c. The Independence Rule.d. The Accounting Principles Rulearrow_forwardThe main portion of an independent auditor’s work in expressing an opinion on financial statements consists of a. Obtaining and examining sufficient appropriate evidence b. Examining compliance with tax laws c. Studying and evaluating internal control d. Comparing client’s total accountabilities with its actual assets as of the end of the reporting periodarrow_forward
- Aside from professional audits of income tax returns, who does the separate non-tax audit program audit?arrow_forwardIf a client uses ADP, a service center, for processing payroll, None of these. auditing standards require the auditor to test ADP’s controls since the service center application involves processing significant financial data. the auditor can assume that the controls are adequate because it is an independent enterprise. and the user auditor decides to rely on ADP’s auditor's report, the user auditor must make reference to the report of the service auditor in the opinion on the user organization's financial statements.arrow_forwardList the supporting documents and records the auditorwill examine in a typical payroll audit in which the primary objective is to detect fraudarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning